According to CardWeb.com, Americans filed a record number of bankruptcies in April in anticipation of a new bankruptcy law scheduled to take effect in October, reported AutoRemarketing.com.

In April, more than 170,000 bankruptcies were filed, up from 145,543 bankruptcies filed in April of 2004. The gain shows a sharp increase in filings after two years of declines, CardWeb.com said.

Many dealer groups, including the National Automobile Dealers Association and the National Alliance of Buy-Here, Pay-Here Dealers (NABD), feel the overhauled law will be welcomed in the industry. The changes tighten the requirements for Chapter 7 filing and put responsibility on debtors instead of creditors.

"Under the new law, it won't be easy for customers to come into a dealership and purchase a vehicle, knowing they will be filing bankruptcy and will be able to hold onto the car without paying for it." said Ken Shilson, founder of the NABD. "The new law will also slow down the bankruptcy process. People can no longer just jump into bankruptcy and receive automatic relief. There is more analysis to it."

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